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Disappointing Report On US Consumer Spending


Carrie Warden, manager of The Sconelady's Coffee Shop, paints a sign for their fall coffee sale in Lawrence, Kan. Americans' confidence in the economy rose only slightly in October from September, according to a monthly survey, as they continue to grapple

Carrie Warden, manager of The Sconelady's Coffee Shop, paints a sign for their fall coffee sale in Lawrence, Kan. Americans' confidence in the economy rose only slightly in October from September, according to a monthly survey, as they continue to grapple

U.S. consumers spent modestly in September.

Monday's report from the Commerce Department said consumer spending rose two-tenths of a percent in September, which is smaller than the gains in the previous two months.

Economists watch consumer spending closely because consumer demand drives most U.S. economic activity.

This and other reports show U.S. consumers are concerned about their economic future so they are buying basic necessities and purchasing fewer luxury goods.

Public opinion polls show U.S. voters are also worried about unemployment, which could hurt President Obama's Democratic Party allies in Congress in Tuesday's election. Opposition Republicans are expected to gain seats in both houses of Congress and are likely to become the majority in the House of Representatives. In the Senate, Republicans are expected to at least weaken the Democratic majority.

News accounts say the U.S. central bank is likely to step up its campaign to bolster the U.S. economy on Wednesday.

That is when analysts say the Federal Reserve is likely to begin a new round of what is called "quantitative easing." The action is intended to increase economic activity by putting more money in circulation.

Some information for this report was provided by AP, AFP and Reuters.

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